Second Mortgage Calculator (Oct 2021)

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Try Our FREE Second Mortgage Calculator for Oct 2021

Are you looking to get the most out of your home equity?

Well, we’ve got a secret to share! Getting a second mortgage could be the key to true financial freedom.

We’re here to help you. We’re giving you the FEE opportunity to calculate how much cash you could unlock from your home as a second mortgage.

This article will help you discover:

  • What’s a second mortgage calculator, and how it works.
  • A simple explanation of second mortgages.
  • If you could qualify for a second mortgage.

Our dedicated team of experts spends days and nights combing the market, looking for the latest equity release news. We want you to have a financially free life.

It’s for this reason that we’ve used our resources to create the most accurate second mortgage calculator on the market.

Now, are you ready to discover how much you could be eligible to unlock for your second mortgage dreams? Find out now!

What Is a Second Mortgage Calculator?

A second mortgage calculator is a tool that helps you determine how much equity you could unlock through a second mortgage on your home.

Lenders will use this calculator to help determine your monthly repayment requirements. The funds can be used on home improvements or other ways to increase your property’s value.

While some lenders will use their own calculators, we’ve built this product to be available to lenders, and you, the general public.

Our Oct 2021 calculator is totally FREE and easy to use, as we’ll explain next.

How Do I Calculate the Amount I Can Borrow on a Second Mortgage?

Using our second mortgage calculator is simple!

All you need to do is enter a few details about your property value, and some personal information, and our expert team will email you a quote.

The whole process will take you about 8 seconds.

What Do Mortgage Lenders Look For?

When opting for a second mortgage (otherwise known as a second-charge mortgage), the lender will likely assess your application far more carefully. They’ll need to ensure that you can afford repayments on both mortgages.

Note that each lender will have different mortgage criteria. Therefore, the information you’re required to supply may vary.

How Does Getting a Second Mortgage Work?

A second mortgage loan won’t come from your original lender. Interestingly, the first lender will always be the priority. In a nutshell, if the home is sold, the original lender with have first access to the home equity.¹

Like with any mortgage that requires payment (unlike equity release), you’ll need to repay your second mortgage, or you could face losing your home.

Why Take Out a Second Mortgage?

There are many reasons as to why one might opt for a second mortgage. These include:

  • If you don’t qualify for other forms of unsecured borrowing. This could be as a result of being self-employed.
  • If your credit rating² has dropped since you signed your original mortgage. If you switch mortgages to pay your mortgage and additional debt, you could end up paying much higher interest rates. With a second mortgage, you’ll only pay additional interest on the new loan amount.
  • Your current mortgage might come with crippling early repayment charges. Therefore, it might be a better option to take out a second mortgage.

What if You Move Home?

In most cases, if you move, you might have to pay off your second-charge mortgage.

However, some lenders may allow you to transfer the loan to your new property.

When Is a Second Mortgage Not a Good Idea?

A second mortgage should only be as a last resort. You should first assess all your alternative options. Ensure that you holistically weigh up the pros and cons.

With a second mortgage, you will end up paying a lot more interest.³

What’s the Difference Between a Second Charge Mortgage & Remortgaging?

Remortgaging is when you take your current mortgage, and switch it to a new deal. You can do so with either your current lender, or a new lender of your choosing. Remortgaging is used to find a better deal or to access more money.

A second mortgage is a whole new deal. If you select this option, you’ll have 2 loans to pay off on your home.

How much will lenders be willing to offer on a second-charge mortgage?

The amount you’ll have to access through a second mortgage will depend on the equity available in your property. The current mortgage on your home will then be subtracted from the total equity, giving you the final results.

You can usually borrow between 75% and 100% of the equity available in your estate, but the amount could differ from one lender to the next.

Once you know the maximum, you must speak to a financial adviser who can guide you on how much you should borrow. They can also educate you on the second mortgage alternatives.

Are Second-Charge Mortgage Interest Rates Higher?

Second mortgage interest rates are usually higher. Before making any decisions, you must ensure that you can afford the repayments. 

However, note that second-charge mortgages can be cheaper than other forms of borrowing.

Got Questions? Check These First

Can You Buy Another House if You Already Have A Mortgage?

How Much Can You Borrow For A Second Mortgage?

How Does A Second Mortgage Work?

How Hard is it to Get A Second Mortgage?

In Conclusion

If you’re looking for ways to unlock further cash from your home, a second-charge mortgage should definitely be considered. However, this type of mortgage needs repayments, so you can expect to undergo affordability checks.

Use our second mortgage calculator to see how much equity you could be eligible to unlock through this method. Once you have your results, speak to your financial adviser, who is qualified to advise you further.

Finally, if you’re 55 or older, or have elderly parents who are looking for some extra cash, discover everything there is to know about equity release and how it could benefit you in Oct 2021.

Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations.

Contributors: Nicola Date, Katherine Read
Reviewed by Francis Hui

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Written by
Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
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Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.
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Written by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
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Written by
Katherine Read
Financial Planning Reporter

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.
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Written by
Nicola Date
Writer & Financial Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

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Equity Release Calculator

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